/ / INSIGHTS

The latest developments in the battle against banking fraud

Authored by: Faisal Husain, Co-Founder and CEO of Synechron

The latest developments in the battle against banking fraud

Banking fraud costs banks billions every year - $15 billion to be exact, according to the 2016 Identity Fraud Study by Javelin. The report found 13.1 million individual instances of fraud in 2015, which has become merely the cost of doing business. Banks and credit card companies have steadily put in place new processes and technologies to minimize this threat – some with great success while others have struggled.

Security is always a moving bar. As new technologies are introduced, fraudsters will identify new ways to gain access to information and ultimately customers’ bank accounts. Therefore, advancements in fraud prevention need to take an equally bold approach to innovation. Whether it is through biometrics, artificial intelligence (AI) or even blockchain, banks have an opportunity to increase transparency, deepen their insights and enhance security to minimize fraudulent activity.

Biometrics
The past two years have marked a significant shift across card and digital payments technologies. The US Payments Forum found that 29 percent of US merchants have enabled EMV technology and almost 75% of consumers have at least one EMV card. However, the migration to EMV in the US, drove a 113% increase in new account fraud, which represents 20% of all fraud, according to Javelin.

Banks need to think about vulnerable entry-points in their existing products and services where they are at high risk of fraud and focus on remediating those high-risk areas. They should look to uncover the most high-risk geographies, products, and even third-party vendors in order to update processes and technologies accordingly.

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